The Financial Literacy Strategy aims to help citizens make sound financial decisions, ultimately improving their well-being, financial security and independence. With the right combination of financial knowledge and skills, citizens can budget better, avoid scams and fraud, save more efficiently and feel better equipped to invest for their future. Financial literacy levels remain low in the EU – less than one fifth of EU citizens have a high level of financial literacy (Eurobarometer 2023), with significant differences across Member States. The Strategy therefore includes measures to enhance financial awareness for all citizens and support Member States’ efforts to improve financial literacy.
The Commission’s Financial Literacy Strategy is based on four mutually reinforcing pillars:
- Coordination and best practices: The Commission will gather stakeholders to facilitate mutual learning of successful national and international financial literacy initiatives and encourage the adoption of best practices by Member States, including actions targeting the needs of specific groups.
- Communication and awareness-raising: The Commission will launch an EU-wide financial literacy campaign that complements and amplifies national efforts to raise citizens’ financial awareness.
- Funding for financial literacy initiatives, including research: The Commission will encourage Member States to use existing EU funding instruments to support financial literacy initiatives and research.
- Monitoring progress and assessing impacts: The Commission will conduct regular Eurobarometer surveys and encourage Member States to develop evaluation tools to track progress of financial literacy levels.
A crucial component of securing financial independence is the possibility for citizens to manage savings better and build wealth over time, including by investing in capital markets. EU citizens have one of the highest savings rates in the world, yet they often do not get the most out of their savings. The Financial Literacy Strategy will raise citizens’ awareness about how to better plan and use their savings, and how to understand investment risks and opportunities.
Beyond knowledge, citizens also need simple and accessible investment opportunities. To address this, today’s package also includes a blueprint for Savings and Investment Accounts (SIAs), in the form of a Commission Recommendation to Member States.
SIAs are accounts provided by authorised financial services providers, even online, which enable retail investors to invest in capital markets instruments. These accounts often come with tax incentives and simplified tax procedures, making them an attractive option for citizens. SIAs will foster a stronger investment culture among EU citizens and transform how they engage with capital markets. SIAs can enable citizens to achieve higher returns on their savings, compared to keeping them in bank deposits, all while maintaining full control over which financial products or economic sectors they choose to invest in. While investing carries risks, these can be managed through diversification and a long-term investment approach.
By moving some of their savings into more productive investments, citizens can also facilitate the financing of businesses, driving economic growth and job creation across Europe, in line with the Savings and Investments Union objectives. Investing in the European economy allows them to contribute to and benefit from the EU’s competitiveness agenda.
In some EU countries, SIAs have already been put in place, although the specific features of these initiatives can vary quite significantly. Today, the Commission is recommending that Member States introduce SIAs where they do not yet exist and enhance existing frameworks by incorporating best practices from across Europe and worldwide. Drawing on these successful experiences, the Commission considers that SIA should include several key features, notably:
- A wide array of providers: A wide range of authorised financial services providers (such as banks, investment firms, neobrokers), including cross-border ones, should be able to offer SIAs, boosting competition and innovation.
- Simplicity: Providers should offer a simple, reliable and easily accessible user experience for retail investors, both online and offline, that makes the buying and selling of assets within an SIA seamless.
- Flexibility: Retail investors should be allowed to open multiple accounts, including with different providers, and should not be faced with excessive fees or cumbersome processes when transferring their portfolios.
- Broad investment opportunities: SIAs should offer investments in various products such as shares, bonds and investment funds, allowing citizens to diversify their portfolios across asset classes, issuers, manufacturers geographies and risk profiles, while excluding highly risky or complex products. SIA providers are encouraged to provide citizens with investment options that allow them to channel their investments into the EU economy to contribute to strategic EU priorities.
- Tax incentives: They are key in encouraging the SIAs and achieving broader retail investor participation. Tax incentives should be well targeted and simple for retail investors, SIA providers and tax administrations to understand and apply.
- Simplified taxation process: Streamlined tax procedures, including relying on SIA providers for tax declarations, can greatly benefit retail investors.
The European Commission will work closely with Member States and stakeholders to implement the Strategy on financial literacy and monitor the take-up of its Recommendation on a Savings and Investment Account to ensure that Europe’s citizens feel confident managing their money and savings, have better access to investment opportunities and thrive financially.
More information: European Commission
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